The marginal cost of producing a marble sculpture is $10,000. The sculpture sold for $15,000. How much producer surplus did the artist receive?

Question

Quizplus · Accepted Answer

Producer surplus is the difference between the price received by the producer and the marginal cost of production. Here, the marginal cost is $10,000 and the sculpture sold for $15,000. Therefore, the producer surplus is $5,000.

The Marginal Cost of Producing a Marble Sculpture Is $10,000